Yahoo Finance Top 3 Undervalued Stocks For The Month
Undervalued companies, such as ThreeD Capital and Conifex Timber, are those that trade at a price below their actual values. Investors can benefit from buying these companies while they are discounted, because they gain when the market prices move towards the stocks’ true values. Below is a list of stocks I’ve compiled that are deemed undervalued based on the latest financial data.
ThreeD Capital Inc. (CNSX:IDK)
ThreeD Capital Inc., formerly known as Brownstone Energy Inc., is a venture capital firm specializing in early stage and growth capital opportunistic investments. The company was established in 1987 and with the market cap of CAD CA$14.75M, it falls under the small-cap category.
IDK’s stock is currently trading at -88% below its actual value of $1.17, at a price of CA$0.14, according to my discounted cash flow model. This mismatch indicates a potential opportunity to buy low. What’s even more appeal is that IDK’s PE ratio stands at around 2.06x while its Capital Markets peer level trades at, 12.34x implying that relative to its comparable set of companies, we can invest in IDK at a lower price. IDK is also strong in terms of its financial health, with short-term assets covering liabilities in the near future as well as in the long run. IDK has zero debt on its books as well, meaning it has no long term debt obligations to worry about. Dig deeper into ThreeD Capital here.
Conifex Timber Inc. (TSX:CFF)
Conifex Timber Inc. primarily manufactures and sells lumber products in the United States, China, Canada, and Japan. Founded in 2007, and now run by Kenneth Shields, the company employs 698 people and with the stock’s market cap sitting at CAD CA$145.94M, it comes under the small-cap category.
CFF’s stock is now floating at around -65% lower than its value of $15.71, at a price tag of CA$5.52, based on its expected future cash flows. This discrepancy gives us a chance to invest in CFF at a discount. Also, CFF’s PE ratio is currently around 6.97x relative to its Forestry peer level of, 10.55x suggesting that relative to its peers, we can purchase CFF’s shares for cheaper. CFF is also strong in terms of its financial health, as near-term assets sufficiently cover liabilities in the near future as well as in the long run.
More detail on Conifex Timber here.
Martinrea International Inc. (TSX:MRE)
Martinrea International Inc. designs, engineers, manufactures, and sells metal parts, assemblies and modules, fluid management systems, and aluminum products primarily to the automotive industry in North America, Europe, and internationally. Established in 1987, and now led by CEO Pat D’Eramo, the company currently employs 15,000 people and with the company’s market capitalisation at CAD CA$1.31B, we can put it in the small-cap stocks category.
MRE’s stock is currently floating at around -42% lower than its true value of $26.11, at a price of CA$15.06, according to my discounted cash flow model. This mismatch signals an opportunity to buy MRE shares at a discount. What’s even more appeal is that MRE’s PE ratio stands at around 7.59x while its Auto Components peer level trades at, 16.95x indicating that relative to other stocks in the industry, you can buy MRE’s shares at a cheaper price. MRE is also in good financial health, as current assets can cover liabilities in the near term and over the long run. It’s debt-to-equity ratio of 64.37% has been reducing over the past couple of years showing MRE’s ability to pay down its debt. More on Martinrea International here.
For more financially sound, undervalued companies to add to your portfolio, explore this interactive list of undervalued stocks.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
